Microsoft Corp. is making strides on its cloud-computing push, the company’s latest quarterly results show, reducing the software giant’s dependence on the weak personal computer market.

The Redmond, Wash., company on Thursday reported a 2% increase in earnings and 12% drop in revenue for its fiscal first-quarter. But the quarterly results, which topped Wall Street expectations, were substantially better after stripping out factors such as currency exchange rates and a prior decision to reduce Microsoft’s smartphone sales.